Nike under the microscope
Plus, business groups react to £20bn government shortfall, McDonald's rethinking its pricing strategy and the evolution of a car dealer dynasty
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Business Thinker
Deep dives on business and leadership
By Sarah Vizard
Business Thinker is going to do a bit of a focus on Nike today – one piece on what’s gone wrong and another on what it has got right!
? Nike: An epic saga of value destruction
Nike has had a difficult time of late. Its latest financial results, released a month ago, caused it to lose $25bn in market capitalisation, with its share price now at its lowest level since 2024. Massimo Giunco worked at the company for 21 years, until 2022, in various communications and marketing roles. In this LinkedIn post, he details what went wrong – and how Nike can turn it around.
? Inside the race to make the world’s fastest running shoes
The broader Nike business might not be doing well, but on innovation in running shoes, Nike is getting things very right. Before the company released the Vaporfly in 2017, only 19 women had ever run the marathon faster than 2 hours and 20 minutes. Last year alone, 26 women did. This is the story of how new technology developed by both Nike and Adidas has made that possible.
Business Agenda
A summary of the most important business news
1. Business groups support chancellor Rachel Reeves’ frustration over the former government’s spending, as she uncovers a £22bn shortfall in public finances. Reeves warns of potential spending cuts and tax hikes in the upcoming October 30 Budget, hinting at increases in capital gains and inheritance taxes. Analysts agree that substantial tax rises and spending cuts are likely necessary to address the financial gap and stabilise the UK economy. You can read more here.
2. Diageo is the latest big business to warn of falling sales. Global revenues at the company have declined for the first time since the pandemic, though Great Britain saw a 5 per cent increase driven by the rising popularity of Guinness and its variations. While overall beer sales grew 18 per cent globally, spirits sales fell 1 per cent in Europe, with scotch, gin and rum underperforming despite gains in raki and Baileys. Diageo’s total net sales dropped 1.4 per cent to $20.3bn, with annual operating profit down 4.8 per cent. You can read more here.
3. Greggs has raised prices on some bakes and sandwiches by up to 10p due to increased staff wage costs but will not implement further price hikes this year. The bakery chain reported a 16.3 per cent rise in underlying pre-tax profits to £74.1m for the first half of the year, with like-for-like sales up 7.4 per cent. Despite inflation pressures, Greggs plans to continue expanding, aiming for more than 3,000 UK shops, with 160 net new openings expected this year. You can read more here.
4. McDonald’s is re-evaluating its pricing strategy after a 1 per cent sales decline in outlets open for at least a year in the three months to the end of June, the first drop since the pandemic. Despite offering discounts to attract cost-conscious customers and counteract boycotts over the Israel-Gaza conflict, the company faced reduced demand, particularly from lower-income customers. You can read more here.
5. The Eurozone economy grew by 0.3 per cent in the second quarter, exceeding expectations and indicating a continued recovery. This growth was stronger than the forecasted 0.2 per cent, despite challenges from geopolitical tensions and weak global growth. Germany’s economy contracted slightly, but France and Spain outperformed expectations with growth driven by external trade and consumer spending. You can read more here.
Business Question
Who am I?
- I was born on this day in 1863
- At the age of 15, I built my first steam engine
- I started my working career as an engineer for the Edison Illuminating Company
- My first company failed and I was forced out of my second
- I was America’s second-ever billionaire
The answer can be found at the bottom of the page.
Business Quote
Inspiration from leaders
“Leaders think and talk about the solutions. Followers think and talk about the problems.”
– Brian Tracy
Business Leader
The best of our content
Growth Engines: The evolution of a car dealer dynasty
Paul Jaconelli, founder of Romans International, shares how his passion for cars evolved into a prestigious high-end dealership in Surrey. With his son Tom now at the helm, the father-son duo is poised to take their family business to new heights.
By maintaining rigorous standards and building a reputation rooted in trust and integrity, the Jaconellis continue to curate exceptional experiences for their clients. As they navigate the future, balancing capital investment with strategic growth, they reflect on their journey and the legacy they are creating in the luxury car market.
You can read more about Romans International here and read more articles from our Growth Engines series here.
Other popular pieces
? Elite sport shows us how to reach the top and stay there
? Big Zuu’s big vision: Innovating music, TV and the water industry
And finally…
By Dougal Shaw
Lego Biopic
Like all toy companies, Lego is learning to diversify. It’s now just as comfortable playing in the world of computer games or animated films, as in the world of plastic bricks.
It still makes those plastic bricks by the billion, of course. They remain the foundation of the Danish behemoth’s business model, allowing it to hit revenues of $8bn (£6bn) last year.
However, they keep these iconic plastic blocks relevant to children through smart tie-ins with third parties. Lego has built brand collaborations with Star Wars, Harry Potter and Minecraft, for example. It was also one of the first toy companies to grasp the possibilities of working with Hollywood, long before Barbie, scoring hits with Batman and Ninjango.
Interestingly, its latest venture is a biopic about a real-life person – soon to be immortalised in plastic, miniaturised form. Lego is making a movie about the life of US music star Pharrell Williams, known for hits like Happy and Get Lucky.
It’s a bold venture. Will everyone clap along, and can they keep the real-life protagonist happy? You can watch the trailer here.
The answer to today’s Business Question is Henry Ford.
